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Foreign bidders are wooing investors in London-listed companies with a growing number of “bear hug” offers designed to be too good to refuse in a tactical shift that underscores the confidence of buyers targeting UK groups.
UK companies received £44bn of such unsolicited public bids at a premium of 20 per cent or more above their share price in the second quarter, the highest value since 2018.
Bidders make so-called “bear hug” bids where they hope to pressure a target’s board into acceptance. Companies listed in the UK have been the recipients of more such offers than any other country in 2026, according to an FT analysis of data from the London Stock Exchange Group.
“It’s the year of the bear hug,” said Kate Cooper, a corporate partner at the law firm Freshfields. “It’s basically a way of saying to shareholders: ‘You’re going to have to take this into your own hands.’”
Companies such as US real estate investor Prologis, the Swedish buyout group EQT and Swiss insurer Zurich are among those that have gone public with bids as they successfully pursued megadeals this year for FTSE stalwarts Segro, Intertek and Beazley respectively.
LSEG defines a bear hug as having a premium of at least 20 per cent more than the company’s closing share price the trading day before a public and unsolicited approach. There have been 12 such moves over the past 12 months — although not all successful or yet agreed. All but four were from companies headquartered outside the UK.
The bear hugs come as overseas buyers have rushed to snap up London-listed companies at a record pace this year, in a deal frenzy that has continued despite a year of turmoil in geopolitics and financial markets.
Acquisitions of UK-listed groups are up 188 per cent this year to a total of $116bn including net debt, according to LSEG data; the highest level year-to-date since 2007.
Prologis is just the latest acquirer to have appealed directly to shareholders in its target, the UK real estate group Segro. The group called on Segro shareholders to encourage its board to accept a deal as it announced a series of successive offers.
That type of move — typically rare for the local market, where bidders often seek to win the backing of the target’s board before going public — allows suitors to capitalise on shareholders’ openness to deals after years of lacklustre performance, according to advisers.
The tactics appeared to pay off, as Segro on Wednesday announced it was set to recommend Prologis’s fourth bid at £14bn — if a firm offer was made at that level.
Such a public statement allows shareholders to weigh in, and investors may take a more practical approach to assessing their options than the board.
“We used to put out unrecommended bear hug announcements 10 to 15 years ago and it was seen as a tactical disaster, and all the shareholders would rally around the board,” said Philip Noblet, Jefferies’ co-head of UK and Ireland investment banking.
“It has very much evolved. In a de-equitising, low-rated market, you’re going to see people get more aggressive,” he added.
The tactic has had a high success rate this year. Although it can put target boards in an uncomfortable position, it has benefits for both sides in opening up discussions.
“The bidders are trying to work out what is the tipping point for shareholders [ . . .] it’s not necessarily a bad thing for a target board,” said Anthony Parsons, executive chair of investment banking and capital markets at Deutsche Bank. “In most deals it’s led to pretty good information for both bidders and targets and helped secure transactions.”
Public situations do not always play out smoothly, however. The board of Irish energy group DCC recommended an improved £5.75bn offer from KKR and Bridgepoint-backed Energy Capital Partners earlier this week, despite holders of over 12 per cent of the FTSE 100 energy company speaking out against the deal. Shareholders are set to vote on the takeover in September.
Other deals have also played out more publicly this year, such as the private equity group Castlelake’s pursuit of the UK budget carrier easyJet. Castlelake eventually secured a recommendation for its takeover proposal only to be gazumped by rival Apollo.
Publicly revealing a takeover bid was “not an easy decision. Everyone would prefer to get a recommendation and to get the board on side. If you are going straight to shareholders that can be a long road so you need to be prepared,” said one senior corporate lawyer. “It does show confidence.”
